Csi Properties Limited · HKEX:497
Csi Properties — FY2019 Earnings Presentation
54 slides from Csi Properties's earnings presentation, June 2019
Slide 1: FY 2019 Final Results Presentation
Strictly confidential FY 2019 Final Results Presentation Jun 2019 FY 2019 Final Results Presentation Sep 2017 Jun 2019
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is provided by CSI Properties Limited (the "Company") based on information available to it and does not constitute a recommendation regarding the securities of the Company and or its subsidiaries The information contained in this presentation
Slide 3: FY2019 Financial Highlights
Section 1 FY2019 Financial Highlights 2
Slide 4: FY 2019 Sales Highlights
FY 2019 Sales Highlights CSI made over HK$3.18 billion of sales this fiscal year and HK$3.16 billion of presales to ensure good cashflow and profits for the coming periods For the year Unrecognised ended Contracted Sales committed up to 31 March 2019 31 March 2019 % HK$'000 HK$'000 Group level Hong
Slide 5: FY 2019 key disposals
FY 2019 key disposals CSI has made a few key disposals for FY2019 to ensure good profitability Disposal price Date completed Projects sold and booked FY2019 Location (HK$m) 8/F, 25/F and 26/F of Oriental Crystal Building, No.46 Lynhurst Terrace May 2018/ HK$155m/ And Central Oct 2018 HK$82m 1/F of O
Slide 6: FY 2019 key acquisitions
FY 2019 key acquisitions CSI has made some key acquisitions in FY2019 to replenish land bank for future growth Purchase price Date acquired Projects acquired YTD Location (HK$m) Jun 2018 Everest Building, Nos. 241-243 Nathan Road Jordan c. 1,900 MTR residential site tender in Yau Tong with Sino Land
Slide 7: FY 2019 results highlights
FY 2019 results highlights (Period ended 31st March) FY2019 FY2018 % change (HK$m) (A) (B) (A/B-1) Gross revenue from property business 3,439 3,969 (13%) Property sale 3,136 3,662 Rental income 302 307 Gross profit 1,065 859 24% Profit from property JV/associates 20 467 (96%) Profit attributable to
Slide 8: FY 2019 results highlights (contd.)
FY 2019 results highlights (contd.) Good cash and cash-equivalent investment balances ensure financial stability FY 2019 FY 2018 (HK$m) 31st Mar 2019 31st Mar 2018 Properties & related assets 21,922 20,110 Cash & bank balances (including cash held by securities brokers) 1,410 2,580 Investments 2,092
Slide 9: Visible disposal and profitability pipeline
Visible disposal and profitability pipeline¹ CSI has a strong visible disposal pipeline in the forthcoming years to ensure good profitability for the Group FY 2020 Asset Type COO Residence in Tuen Mun – Remaining commercial podium Commercial (*residential all sold) 1/3 of 16 residential units at Duk
Slide 10: Pro-forma Balance Sheet adjusted for market valuation as at 31 March 2019
Pro-forma Balance Sheet adjusted for market valuation as at 31 March 2019 Properties valued at historical cost basis on book with no revaluation surplus. Even after revaluation adjustment still represents significant value in terms of a significant discount to pro forma adjusted NAV of HK$2.08 per s
Slide 11: FY 2019 financial highlights
FY 2019 financial highlights FY 2019 FY 2018 FY 2017 (HK$m) (HK$m) (HK$m) Revenue 3,439 3,969 1,868 Gross profit 1,064 859 601 Margin % 31.0% 21.6% 32.2% EBITDA1 1,078 1,340 1,531 Margin % 31.34% 33.8% 82.0% Interest expenses2 363 316 269 Cash and cash equivalent 1,410 2,580 3,603 Short-term realisa
Slide 12: Consistent profitability and growth
Consistent profitability and growth Revenue Gross profit and gross profit margin 4,000 2,000 80% 307 3,439 3,218 1,666 302 64% 3,000 225 1,500 53% 60% 2,578 31% 52% 48% 1,172 208 2,201 36% 1,065 22% (HK$m) (HK$m) 226 1,868 940 2,000 1,000 859 40% 281 3,662 738 32% 3,137 2,993 1,162 601 2,370 1,000 2
Slide 13: FY 2019 sales highlights
FY 2019 sales highlights Debt / EBITDA1 EBITDA1 / net interest expense2 and cash3 / short-term debt 12 40 9.6 34.0 10 35 8.3 7.7 30 8 7.2 7.0 5.8 25 (HKD m) (x) 6 4.8 4.7 20 3.8 4.0 14.3 4 3.4 15 11.6 1.8 2.2 8.3 1.5 10 6.3 5.7 2 0.7 4.1 4.0 4.2 3.3 2.2 3.0 0.1 5 1.8 1.7 1.9 0.7 0 0 FY12 FY13 FY14 F
Slide 14: Conservative capital structure backed by prudent financial policies
Conservative capital structure backed by prudent financial policies • Prudent funding and treasury policy with regard to overall business operations Prudent funding and • Effective interest rate of c. 3.5% for the Group's bank borrowings as at 30 Mar 2019 treasury policy • Prudent dividend policy (c
Slide 15: Portfolio of prime properties in premier locations
Portfolio of prime properties in premier locations (as at 31 Mar 2019) Commercial properties Gross area 1 Date of sq.ft. (000s) Purchase (approx) Aug-06/ G/F, 51 carparks of Capital Centre (formerly AXA Centre) Wan Chai 17 Aug-07/Jun-08 Novotel Nathan Road Hotel Jordan Jul-12 – Nov-15 220 Nos. 2–4 S
Slide 16: Why invest in CSI properties
Why invest in CSI properties Since 2004, as the pioneer of real estate asset crystallisation, CSI has unlocked Proven value unlocking value by selling prime assets in Hong Kong and Shanghai and generated capabilities approximately HK$10 billion cash profits via over 50 major transactions Unlike deve
Slide 17: Prime Property Portfolio Review
Section 2 Prime Property Portfolio Review 16
Slide 18: Commercial properties highlights
Commercial properties highlights Key prime commercial assets in Hong Kong and Shanghai helps to anchor c. HK$300+ million rental income annually Novotel Hotel – Jordan Everest Building– Jordan Richgate Plaza – Shanghai OCTA Tower – Kowloon Bay In Point – Shanghai 17
Slide 19: Central properties highlights
Central properties highlights Prime commercial assets under management in Central at GFA of 400,000+ sq.ft., anchoring Group’s future profit pipeline Oriental Crystal Building Sites at Wellington St. Gage St./ Graham St. • • Commercial redevelopment site from URA 18 office floors, 2 ground floor sho
Slide 20: Central properties highlights- Gage St./ Graham St. (50% JV)
Central properties highlights- Gage St./ Graham St. (50% JV) URA Tender won for Gage Street and Graham Street site marks a new landmark for the Group Gage St./ Graham St. The Center • The Group won the tender for Site C of the Peel Street/Graham Street project from the Urban Renewal Authority (“URA”
Slide 21: Central properties highlights – Oriental Crystal Commercial Building
Central properties highlights – Oriental Crystal Commercial Building No. 46 Lynhurst Terrace • The Group acquired via 18 office floors, 2 ground floor shops and rooftop of this office building in Central/SOHO for a consideration of c. HK$700 million for GFA of around 43,000 sq.ft. • Renovation of th
Slide 22: Central properties highlights – SOHO Central
Central properties highlights – SOHO Central 2-4 Shelley Street, Central (Sale in Progress) 46-48 Cochrane Street, Central • Situated in Central’s Soho area, 25-storeys of chic yet contemporary office space with total GFA over 40,000 sq.ft. • Situated in the core of Central district, adjacent to the
Slide 23: Novotel Hotel Kowloon
Novotel Hotel Kowloon Novotel Hotel Jordan Our Property : • 4-star international branded hotel with commercial podium in Nathan Rd 348 prime Nathan Road • 5-min travelling distance from future Express Rail Link terminus • 389 hotel rooms and prime shopping space in prime Jordan • Consolidated 100% i
Slide 24: 21-27 Ashley Road – Tsim Sha Tsui
21-27 Ashley Road – Tsim Sha Tsui 21-27 Ashley Road Our Property : Ashley Road 21 - 27 • Ginza-style F&B buildings located in the heart of Tsim Sha Tsui • Key landmarks in area including Peninsula Hotel/ Harbour City/ iSquare all with 3-minutes walking distance • GFA of 62,000 sq.ft. with current ma
Slide 25: CSI's Major Commercial Property Pipeline – Kowloon East
CSI’s Major Commercial Property Pipeline – Kowloon East Kowloon Bay Office Site (Presale in Progress) OCTA Tower • JV with Sino Land and Billion Development, the two big landlords • Bought the whole office tower with 3 other JV partners via a in Kowloon Bay CBD2 (CSI - 30%) at Wai Yip Street consort
Slide 26: Everest Building
Everest Building Prime commercial/ retail building at the heart of Jordan Everest Building (Grade B office/retail repositioning) ▪ The Group purchased a prime commercial./ retail building at the heart of Jordan at a total cost of c. HK@1.9bn in May 2018 ▪ The property is located at No. 241 and 243 N
Slide 27: Yuen Long Industrial Building Revitalization
Yuen Long Industrial Building Revitalization Yuen Long Industrial Building (Mixed Yuen Commercial Long Industrial UseBuilding Conversion) (Mixed Commercial Use Conversion) Long Ping MTR station ▪ CSI, together with another 50% JV partner, spent HK$1,037 million in late 2017 to acquire this industria
Slide 28: In-Point Shopping Mall
In-Point Shopping Mall Premium Retail Project in Jing’an, Shanghai Our Property : Wujiang Rd no. 169, Jing’an In-point Shopping Mall • Popular shopping mall located in the heart of Shanghai just behind the Four Seasons Hotel on Wujiang Road • GFA of 122,000 sq.ft. with current market value at approx
Slide 29: Richgate Plaza
Richgate Plaza Premium Retail Project in XinTianDi, Shanghai Richgate Plaza ▪ The Group purchased a retail shopping mall named Richgate Plaza in prime Xintiandi area for a total consideration of RMB 1.37 billion with total GFA of 11.3k sqm in 2017 ▪ Cost amounts to approximately RMB121k psm ▪ Curren
Slide 30: Couture Homes – Luxury Residential Development Projects Highlights
Couture Homes – Luxury Residential Development Projects Highlights Dukes Place 47 Perkins Road – Beijing Legendale Jardine’s Lookout (Refurbishment) –Beijing 8-12 Peak Road (Refurbishment) - The Peak Queen’s Gate - Shanghai
Slide 31: Dukes Place – JV with World-class Luxury Apartments in Jardine's Lookout
Dukes Place – JV with World-class Luxury Apartments in Jardine’s Lookout • Dukes Place is our world-class luxury apartment project at the Jardine’s Lookout in Hong Kong • Nestled in the heart of a quiet ultra-high net-worth neighborhood, Dukes Place offers 16 spacious apartments with multiple layout
Slide 32: Peak Road Project
Peak Road Project - Precious Residential Development with Victoria Harbour seaview Peak Road Project Acquired c. 60.3% interest in this old residential building in June 2015 at HK$1.8 billion Interocean Court 17 apartments and one house with total saleable area of 48,544 sf OPUS Hong Kong AV amounts
Slide 33: COO Residence Project
COO Residence Project – (ALL 204 RESIDENTIAL UNITS PRESOLD) Luxurious Highrise Residential Project in Tuen Mun • Located at Tuen Mun Yan Ching Street, the street is adjacent to V City and Tuen Mun Town Plaza, being the very heart of the city. Presale started in early Sep 2017 and all of the 204 resi
Slide 34: First MTR Residential Project- Mass Residential site at Yau Tong
First MTR Residential Project- Mass Residential site at Yau Tong • The Group acquired with its JV partner Sino Land (80% partner) through MTR tender in April 2018 a residential site at Yau Tong at the total consideration of approximately HK$2.62bn. • The property is located near the Yau Tong MTR sta
Slide 35: Queen's Gate – (Sale of Last Batch remains)
Queen’s Gate – (Sale of Last Batch remains) The Finest Expression of British Elegance • A luxurious villa district in Dahongqiao area, Shanghai named as Queen’s Gate and only 15 minutes driving distance from the new Hong Qiao International Airport • Developed into 224 luxurious villas with additiona
Slide 36: Beijing Legendale Residential Project
Beijing Legendale Residential Project - Luxurious Residential Renovation Project in Beijing Renderings for interiors post renovation • The Group entered into a preliminary purchase agreement in October 2016 in conjunction with a joint venture partner in the acquisition of 118 units totaling around 2
Slide 37: Barker Road Project
Barker Road Project - Precious Single Lot House Site at the Peak Acquired the heritage site at 47 Barker Road in February 2011 at HK$204 million A rare land lot at Barker Road in the ultra premier residential area at the Peak The house will be redesigned and refurbished and will blend in with its hi
Slide 38: Fan Kam Road Project
Fan Kam Road Project Luxurious Manor Site in Kwu Tung South • The site was acquired by CSI Properties in 2015 and is a very rare manor site next to the Hong Kong Golf Club and Beas River Country Club of The Hong Kong Jockey Club. Other than being adjacent to renowned clubs, it is also extremely conv
Slide 39: Maryknoll Missionary House - Project in Stanley
Maryknoll Missionary House - Project in Stanley • The Group acquired via a 50-50 JV the Maryknoll House in Stanley for a consideration of c. HK$780 million for the site of around 83,000 sq.ft. • The site is located adjacent to Stanley Knoll, a high end residential area in Stanley with stunning seavi
Slide 40: kau to HIGHLAND- (ALL SOLD)
kau to HIGHLAND- (ALL SOLD) The Only Pure House Collection in New Kau To • Acquisition of Kau To Shan land site through government tender in May 2012, G.F.A. of approximately 50,000 sq. ft. for a cost of HK$531 million • Developed into 20 luxury villas of approximately 2,000 to 4,000 sq.ft. each • A
Slide 41: Company Background
Section 3 Company Background 40
Slide 42: Why invest in CSI properties
Why invest in CSI properties Leading HK-based Mid-Cap Property Investor and Developer 15 Years of Operation Since 2004 US$4Bn+ AUM Generated Average IRR of ~30% 220+ by Applying the Proven Strategy Real Estate Professionals Applied Proven Strategy of “Buy-Fix-Sell” to a Portfolio of ~3MM sq.ft. Prim
Slide 43: Corporate history and key milestone
Corporate history and key milestone 2019 Over 20 prime commercial and residential projects in Hong Kong and Shanghai Net assets • Total staff of over 220 people • Net asset over HK$12.0 billion (10 million HKD) 2016 • The group has 2015 successfully issued 250 120 • Kau To HIghland awarded as millio
Slide 44: Our business model
Our business model Since the inception at 2004, CSI has evolved from an asset trading focused property company to becoming a solid, mid-cap full service real estate investor/ developer with 5 major lines of business Commercial properties Couture Homes Greenfield Commercial Strong rental Super luxury
Slide 45: Proven track record in profit
Proven track record in profit Proven profitability for our properties with all cash profit only and no revaluation gain, with stable profitability of averaging over HK$1 billion in last few years Net profit1 FY19: 530 4,000 FY18: 1,010 3,000 FY14: 815 FY17: 1,347 (HK$m) FY13: 903 2,000 1,000 FY11: 8
Slide 46: Proven track record in dividend
Proven track record in dividend Steady dividend policy at 12-15% of net profit Dividend payout 250.0 HK$115m share buyback 204.0 198.0 200.0 162.6 150.0 140.0 131.0 (HK$m) HK$99m 106.0 HK$100m share 100.0 share buyback 82.3 buyback 70.6 66.1 50.0 40.8 15.8 0.0 31/3/2009 31/3/2010 31/3/2011 31/3/2012
Slide 47: Successful new perpetual capital securities issue in 2017
Successful new perpetual capital securities issue in 2017 reaffirms debt market as a solid financing avenue • The Group successfully completed the inaugural perpetual capital securities issue arranged by DBS, HSBC, JP Morgan and UBS etc. to raise US$200 million in September 2017 at an attractive cou
Slide 48: Proven investment and capital recycling track record of delivering attractive IRR's
Proven investment and capital recycling track record of delivering attractive IRR’s Selected projects and returns Months of Projects holding Cost (HK$m) Selling price (HK$m) IRR 23% 288 234 B/F Ginza Plaza, Macau 3 171% 47% 496 338 11/F – 23/F Henan Building, Wanchai 13 70% 25% 1,029 821 Nos. 703-70
Slide 49: Highly experienced and disciplined management team
Highly experienced and disciplined management team Group senior management • Acquired control in CSI in 2004 as a platform to expand his property investment business • Currently a non-executive director of HKT Limited, HKT Management Limited and HKC (Holdings) Limited and was previously a non-execut
Slide 50: Highly experienced and disciplined management team
Highly experienced and disciplined management team Commercial property • Joined CSI in 2019 as managing director for its commercial property division. • Overs 25 years of experience in finance and real estate investments in Asia and the U.S., including leadership roles in Bernard Lau Lehman Brothers
Slide 51: Highly experienced and disciplined management team
Highly experienced and disciplined management team Couture Homes ("CH") Execution Director of CSI • Joined CSI in 2011, prior to which he worked as the Director of Savills Hong Kong Limited and Managing Director of Jimmy Fong • Over 20 years of experience in luxury residential property development a
Slide 52: Strong management team with accolades
Strong management team with accolades • Chairman Chung was nominated as one of the “Asia's Business Leaders ” by CNBC Asia in 2014 • The Group was also awarded the “Best Mid–cap Company in Hong Kong” for 2018 and “Best Small–cap Company in Hong Kong” for 2013 and 2014 in Asia's Best Managed Companie
Slide 53: Long term sponsorship from the Chairman and an institutional investor focused equity register
Long term sponsorship from the Chairman and an institutional investor focused equity register Current shareholding overview1 • Strong commitment of Chairman and controlling shareholder indicating confidence in the Others 27.5% future growth prospect of CSI • Mr. Mico Chung's ownership interest in Co
Slide 54: Q&A
Q&A 20132018 & 2014 Best HK Mid-Cap Company 53